SEND

Third of ‘safety-valve’ councils face ‘bankruptcy’

Local authorities receiving bailouts in exchange for savings plans still fear they won't set balanced budgets

Local authorities receiving bailouts in exchange for savings plans still fear they won't set balanced budgets

Exclusive

More than a third of councils with “safety-valve” deals to plug high-needs deficits face bankruptcy, despite being set to receive more than £1 billion in government bailouts before the end of the decade.

Since 2021, 38 councils with eye-watering SEND deficits have had to strike deals that give them annual cash injections in return for savings plans – with strings attached.

In 2020 the government overrode standard accounting rules, letting councils keep dedicated schools grant (DSG) deficits off their general revenue books, which enabled them to set overall balanced budgets.

That override is set to end in 2026, after which it was hoped councils would have eradicated these deficits.

But more than a third (38 per cent) of the 28 safety-valve councils that responded to a freedom of information request admitted they were at risk of issuing a section 114 notice – meaning they could not balance their budgets – in the next three years.

This was partly driven by the escalating cost of SEND provision.

Section 114s restrict council spending to the statutory minimum, forcing more curbs to SEND services.

‘Not on track’

Stoke-on-Trent said it was facing “a risk of section 114 due to pressures and demands across all of children’s services”. It was “not on track” to balance its DSG deficit by 2025, as agreed in its safety-valve deal, with its officers in “constant dialogue with the DfE”.

North Tyneside’s risk of not being able to ensure financial sustainability without raiding reserves is currently flagged as an “A1 risk” with “very high likelihood”.

However, the authority said this did not mean that it expected to issue a section 114 notice between now and 2028.

Bath and North East Somerset is one of five councils whose safety-valve deals are currently “subject to review” after it failed to hit spending targets.

The authority joined the programme in 2022-23, securing a deal for £19.2 million – but after overspending in its high-needs block by £9.3 million in 2023-24, “grant payments have been suspended”, council papers said.

Scott Gardner, senior SEND accountant for Achieving for Children, which runs Richmond’s children’s services, said it had been “highlighted by the DfE as a success of the [safety valve] programme”.

“However if the funding ceases there is a high risk that within five years the borough will be in the same financial position it was before [it] was introduced.”

Dorset is “making progress”, but this has “not yet translated into financial savings or efficiencies”.

The council expected to end the 2022-23 financial year with a £10.4 million high-needs deficit, but it almost doubled to £19.7 million. In March 2024 its £24 million deficit was more than triple a predicted £7 million.

Council officers recently met with DfE colleagues to “find a way forward”.

‘We’ll be effectively bankrupt’

Bristol’s DSG deficit rose to £58.6 million at the end of 2023-24. It received only £21.5 million in safety-valve funding from the DfE to offset this, leaving it carrying over a £37.1 million deficit into this year.

Steven Peacock, its chief executive, warned recently of the SEND bailout: “If we get this wrong, we’ll be effectively bankrupt.”

Councils are also missing their targets to reduce EHCPs under the agreements, as demand for SEND support soars. 

More families are also objecting to council decisions. In 2022-23 the number of SEN appeal outcomes rose by a third to 12,000, of which 8,000 were decided by tribunal. Ninety-eight per cent of tribunals found in favour of families, up two percentage points on the year before.

A third of the responding safety-valve councils said the risk of them not being able to deliver their statutory duties for SEND children had risen in the previous year, with a quarter saying it had remained unchanged.

Catriona Moore
Catriona Moore

All but one of Bath and North East Somerset’s three special schools and six resource bases are “full or oversubscribed”. It has “struggled to meet its statutory duties” and “had to rely on expensive out of area placements”.

A new SEND advice service the council is launching in September will aim to reduce EHCPs” and to “focus on data”.

Councils are also being hampered by disorganised commissioning of SEND services.

In the 32 Ofsted area SEND inspections since January 2023, almost a third were graded 3 (with systematic failings), another third 1 (typically positive), while almost half were 2 (inconsistent).

Catriona Moore, policy manager at the Independent Provider of Special Education Advice, warned recently that safety-valve councils’ targets, which include reducing EHC needs assessments, risk councils “exposing themselves to more legal challenges than ever”.

Latest education roles from

Chief Education Officer (Deputy CEO)

Chief Education Officer (Deputy CEO)

Romero Catholic Academy Trust

Director of Academy Finance and Operations

Director of Academy Finance and Operations

Ormiston Academies Trust

Principal & Chief Executive

Principal & Chief Executive

Truro & Penwith College

Group Director of Marketing, Communications & External Engagement

Group Director of Marketing, Communications & External Engagement

London & South East Education Group

Sponsored posts

Sponsored post

AI Safety: From DfE Guidance to Classroom Confidence

Darren Coxon, edtech consultant and AI education specialist, working with The National College, explores the DfE’s expectations for AI...

SWAdvertorial
Sponsored post

How accurate spend information is helping schools identify savings

One the biggest issues schools face when it comes to saving money on everyday purchases is a lack of...

SWAdvertorial
Sponsored post

Building Character, Increasing Engagement and Growing Leaders: A Whole School Approach

Research increasingly shows that character education is just as important as academic achievement in shaping pupils’ long-term success. Studies...

SWAdvertorial
Sponsored post

Educators launch national AI framework to guide schools and colleges

More than 250 schools and colleges across the UK have already enrolled in AiEd Certified, a new certification framework...

SWAdvertorial

More from this theme

SEND

‘Best practice’ guidance promised for SEN units

National Children's Bureau will deliver review on how mainstream schools can set up SEN units as part of government's...

Ruth Lucas
SEND

SEND spend could hit £15bn (more than some government departments)

IFS calls on government spending watchdog to publish annual forecasts for high needs spending and deficits

Freddie Whittaker
SEND

Councils to test ‘local offer’ as part of new SEND inclusion plans

But the fate of Conservative change programme initiatives remains unclear

Ruth Lucas
SEND

Solving SEND: MPs reveal their 48-point plan

National SEND standards, special school 'centres of excellence' and exclusion inspection metrics - the education committee’s policy proposals in...

Freddie Whittaker

Your thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *